Mainstreet Bancshares, located in Felfax, Virginia, is constraining it on marijuana to solve the dilemma of income. These dilemma weaken the branch of its bank services.
After the opening of 2021, this is a $ 2.2 billion asset Touting its Avenu unit As a unique BAA solution. Mainstreet runs Avenu without a third -party fintech partner. Mainstreet maintains strict control of the classification accounts that record daily transactions and customer identity and other key regulatory functions.
Although centered on the mentality of compliance, this makes people neatly avoid temporary Problem Other banks are embedded in financial joint ventures (completely get rid of space), and the market adopts facts that a different story is proved. For more than three years, Avenu has a fully operating customer. Although it has improved throughout the pipeline, the bottom line results have not been predicted.
Mainstreet aims at 2024, because Avenu annually extends more than $ 200 million in deposits and extends to a profit and loss balance. As of December 31, Mainstreet reported a $ 41 million Avenu deposit. The cost continued to exceed the income in 2024, causing the pre -tax loss of the market segment to $ 3.6 million. After failing to achieve the goal, Mainstreet revealed last week that this will damage the value of Avenu software and write it into the current market value. The decision prompted the fourth quarter of the fourth quarter as of the three months as of December 31, with a loss of $ 16.2 million.
CEO Jeff Dick said the damage determines "the future survivability independent of Avenu", which is equivalent to confirming the time of the fiscal status of the solution. "When the accountant watched, they said: 'We expect the income in 2024 (a certain amount).' It is not there."
Mainstreet is studying two tracks to solve the lack of Avenu's income. Dick said that on the one hand, banks have doubled their efforts to attract customers, including "the one or two of the whales we can bring, and it really improves everything." "What we want to do now ... is to get it there. Let the customer add it.
Another song involves marijuana.
Dick said that Mainstreet began to explore the potential of marijuana banks at the end of 2023. The bank is expected to launch an application in this spring that allows users to purchase cashless purchases in the cannabis retailers. The Venu application planned by the mainstreet program will be located on the Avenu platform. Users will download the application, open a mainstream account, and then transfer ACH funds through automated liquidation houses or transfer ACH funds from its major banks. For retailers, the structure of Venu is a typical merchant solution. "They got a virtual application for checkout, instrument boards, all reports, and all the content provided by ordinary businessman solutions, unless this is our closed -loop solution unless this is in this case."
The cash loaded on the VENU application will enrich the deposit of Mainstreet. The purchase of the store will generate non -interest income. Dick admires the obstacles. How does it consolidate the leading market position by setting a low price, which is enough to make a profit, but to keep the product highly competitive. Mainstreet wants to do the same thing to Venu. However, its direct challenge is to marijuana retailers on board. "Therefore, when you download your application as a customer, you will go to the store," Dick said.
"All of this is to give consumers another way to pay ... some cash from this business."
BEAU Whitney, Chief Economist at the National Industrial cannabis committee and the National Association of God, predicts that legal marijuana sales will reach US $ 35 billion in 2025 and will increase to $ 87 billion in the next ten years. A large part of these sales still trades in cash. Since 2015, Safe Harbour Financial, Golden, who has been providing marijuana bank services, has recently estimated that 70 % of marijuana companies have been operated with cash.
Although such statistics seem to show the prospects of Venu, Tyler Beuerlein, the chief strategic business development officer of Safe Harbour, said that successfully has no doubt about the Mainstreet APP. On the one hand, it will compete with several established applications with extensive distribution. Beuerlein said: "Don't discount what (Mainstreet), but it has existed since 2016."
More widely speaking, the cannabis industry has matured in the past three years. Banks entering this field have rely on the opportunity to open up, and today the newcomers are more likely to encounter fierce competition. Belin said: "This industry has grown to what I want to say is that the players who dominate the position have established their own level." "It will be very difficult to replace them."
Indeed, Berlin predicts that the number of financial institutions that withdraw from cannabis in 2025 will exceed the number of new financial institutions. "This has become an institution that enters the space that needs to provide a set of services, or they will never enable the business to prove the development of the cannabis plan and push it to the market. The strict reality of the market. "
At the same time, although 39 states allow medical or entertainment activities, marijuana is still illegal at the federal level. The industry has prevented the industry from visiting most of the main payment processors, including MasterCard, Visa and American Express. In fact, a common solution involves the so -called cashless ATM machine withdrawal in cannabis retailers, which is actually unauthorized. Many payment processors are trying to prevent handling these transactions.
Although Dick admits the health competition level in the cannabis field, he believes that the attraction of bank business applications owned by banks will be quite large. Dick said: "Applications, networks and merchant virtual terminals are on closed -loop systems with strong encryption and network security." "This classification account is adjusted every day. Deposit is FDIC insurance. We focus on the use of easy to use. Loading applications simplify consumer experience. Our virtual terminal is also safe and easy to use, and has a strong back -end businessman.
Mainstreet's introduction of Avenu is roughly consistent, and reviews the embedded financial partnerships seeking with fintech. Dozens of institutions have fallen into law enforcement operations. A number, including the Blue Ridge Bank and Five -star bank in Warsaw, New YorkI have exited space.
Dick helped find the Mainstreet office as an executive in 2003, but he did not criticize the regulatory agency. Nevertheless, he still acknowledged that in recent years, the close attention has affected the arrangement of BAA and affected the speed of Avenu's launch.
Dick said: "We first talked about in early 2023, then in the middle, and then proposed the solution in 2024." "We need to ensure that it can meet regulatory expectations."